Getting Started on Your Numismatic Coin Collection

money-605077_640If you’ve ever held an early 20th-century $20 Saint-Gaudens gold coin in your hand, you’ll probably understand immediately why many people are so passionate about collecting such items. This classic double eagle coin features the iconic images of the Lady Liberty and of a flying eagle designed by Augustus Saint-Gaudens, one of the most preeminent sculptors of the American Renaissance era.

On the obverse side of this coin, Lady Liberty is portrayed marching triumphantly while holding aloft a torch and an olive branch. On its reverse side, the magnificent bald eagle is portrayed airborne in mid-flight, the sun shining brightly behind it. It has been said that there are few other pieces in the numismatic world that can compare to this coin, which is exactly why it is one of the most sought-after coins in the world today.

The attention to detail exhibited in many numismatic gold coins and the history and provenance that these pieces represent only serve to emphasize the natural radiance of the precious metal from which these coins were struck. These coins are truly singular in the way they capture the beauty and permanence of gold, one of the most valuable commodities in human history.

What is a numismatic coin?

But what exactly is a numismatic coin? If you’re an aspiring gold coin collector, it’s worth noting that numismatic coins comprise one of the two groups of gold coins you’ll encounter in the gold coin trading business. The other group comprises what are known as bullion coins.

Bullion coins are often favored by people who buy gold as an alternative store of value. This is because historically, gold has been able to excellently hold its value during times of economic, political, and social turmoil. Gold has also had a good track record of being able to maintain its purchasing power, even when the values of goods and services rise. As such, gold bullion coins are considered by many people to be invaluable instruments for hedging inflation and currency devaluations.

To be easily traded, gold bullion coins are sold in standard weight classes and with specific levels of purity, all depending on benchmarks observed by the mints that make them. Typically, their purity is set at no less than 900 parts per thousand, and the weights are usually fractions or multiples of a troy ounce. This standardization in their gold content, along with their small weight classes, makes gold bullion coins particularly liquid, which means that they are quite easy to sell.

By contrast, numismatic gold coins possess an external value that is above and beyond the base value of the gold that they contain. Aptly called “numismatic value,” this value can be derived from various qualities. For instance, a coin may be valuable because it represents an important period in history or because it was minted in a special manner. It could also be that the coin is rare, so when the demand for it is high, it is very much possible for this coin’s value to appreciate sharply over time.

As you can imagine, these external variables can affect the value of numismatic coins in a way that isn’t quite the same as the way the value of bullion coins is affected by regular market forces. This has one important implication: when you decide to start collecting numismatic coins, you must also commit to an ongoing quest for knowledge about the industry and the different numismatic coin products available in the market. It is important if you want to become well-versed about critical information that can impact you financially. Such information can include the product’s approximate prices, learning how to verify the coins’ authenticity, and speculating on your next moves based on the market demands for the coins.

Know what you want to collect

Establishing objectives or some sort of strategy for your collecting endeavor will make it easier for you to determine the items that you will pursue and those that you can live without. Here are some collecting ideas you might want to consider:

  • Collecting coins from a specific country
  • Collecting a series of coins from a specific year or time period
  • Collecting coins of a particular denomination
  • Collecting coins which feature the images of Lady Liberty, Native Americans, historical figures, and other characters.

The possibilities are endless, but it is always best to build your numismatic gold coin collection around your interests to increase the likelihood that you will enjoy acquiring new pieces in the future.

Know where to buy your numismatic gold coins

You should be aware that as the popularity of gold coin collecting grows, the risk of becoming defrauded, scammed, or victimized by hustlers and people with criminal intent also rises, especially now when the digital economy is playing a bigger role in our daily lives.

If you are an inexperienced buyer, you should only buy and sell gold coins from a reputable national dealer with extensive experience in the industry. Find out whether the dealer of your choice is accredited or is a member of organizations like the American Numismatic Association (ANA), Better Business Bureau (BBB), Business Consumer Alliance (BAC), Industry Council for Tangible Assets (ICTA), Numismatic Guaranty Corporation (NGC), and Professional Coin Grading Services (PCGS). If you want to build your network and meet other collectors, check the directories of these organizations for listings of clubs you can join or events you can attend in your area.

Remember that while there are risks involved in buying and collecting any high-value assets like rare and collectible numismatic gold coins, such risks are easily mitigated if you educate yourself. For the most part, coin collecting will be a rewarding experience that has the potential to be lucrative at the same time.

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